Compliance, Licensing and Insurance Explained
The true cost of being a landlord in 2025
Once upon a time, being a landlord was seen as a relatively straightforward way to invest. You bought a property, found a tenant, maintained the property and ensured that rent rolled in. Those days are long gone. In 2025, the reality of running even a single rental property has become a complex and expensive exercise in compliance, with many landlords discovering just how quickly small costs can add up.
From selective licensing fees to safety checks and landlord insurance, the list of legal and financial obligations is now extensive. The recent case involving Chancellor Rachel Reeves, who failed to secure a selective licence on her own property, is a reminder that even the most well-informed landlord can slip up in today’s regulatory maze.
The hidden bills every landlord faces
As someone who oversees a small buy-to-let property company, I share the same pain as many of our landlord clients. One flat in our family firm’s portfolio contains a door that is deemed to require an annual fire safety inspection. The most recent bill for that service from the management company came in at £222.
That may be a relatively rare example, but let’s outline some more regular requirements. Remember prices may vary depending on your property and other factors. Before a tenancy even begins, landlords can expect to pay for:
- Tenant referencing and checks: around £120 for a single tenant or £240 for a couple.
- Tenancy agreements: at least £250 to have them drawn up correctly.
- Inventory reports: between £130 and £300 depending on property size.
Then there are the regular safety and compliance costs, which have become unavoidable:
- Gas safety certificates: about £80 plus VAT annually.
- Legionella testing: around £60 every two years.
- Electrical installation condition reports: £150 every three to five years.
- Energy performance certificate: £90 every ten years.
- Selective licensing: required in many council areas at circa £995, with renewals due every five years.
Optional extras, such as providing electrical appliances, come with testing obligations that can cost around £70 a year per property. These costs are in addition to landlord insurance, other maintenance overheads, and tax changes are factored in. Plus, the time and energy needed to oversee and coordinate compliance with the rules, as our Chancellor recently found out.
As a side note, like Rachel Reeves, we also had a property that fell within one of Southwark Council’s selective licence zones for landlords. In our case, it was by just 1 meter. As irritating as that proved, adherence to the rules was not an issue.
The price of paperwork
Landlord Samantha Collett told The Times, “The rules and regulations we have to follow now are a minefield. Ultimately, all these extra costs have been passed on to tenants.” It’s an understandable reaction. Many landlords find themselves paying hundreds, sometimes thousands, each year just to stay compliant, and often with little clarity about what’s actually required of them.
It’s not just small landlords feeling the pressure. Larger property investors and estate agencies now employ dedicated compliance teams to keep on top of new rules. London-based agent Chestertons has tripled the size of its compliance department in two years, underlining just how much red tape has increased.
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The regulatory squeeze
The Renters’ Rights Act, which received Royal Assent this year, is the biggest overhaul of the rental market in a generation. It bans “no-fault” evictions, limits rent increases to once a year, and introduces tougher penalties for landlords who fall foul of the rules.
When combined with years of rising mortgage rates and diminishing tax relief, it’s easy to see why many landlords are bowing out of the market. Data from Hamptons shows buy-to-let investors now make up just 10.3% of property buyers, down from 15.7% a decade ago – the lowest share on record.
Why insurance and compliance go hand in hand
With so many financial and legal risks, landlord insurance is no longer optional, it’s essential. From public liability and loss of rent to property damage and legal expenses, having the right policy in place helps protect against unexpected costs that can otherwise spiral.
At Plan Insurance Brokers, we work with landlords of all sizes to tailor cover that meets both regulatory and practical needs. Whether it’s a single buy-to-let or a growing portfolio, expert advice can save you far more than it costs.
The bottom line
Being a landlord today means operating within one of the most heavily regulated sectors in the UK. The financial rewards can still be worthwhile, but only if you’re prepared for the full picture, not just the rent payments, but the paperwork, inspections, and insurance that go with them.
It’s no longer enough to be a good landlord. You need to be a compliant one too.
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